FOOD prices could soar by as much as 10% this year, the chairman of Marks & Spencer (M&S) has warned.
This comes just a day after Andrew Bailey, governor of the Bank of England, warned that households could suffer from an “apocalyptic” shock from rising food prices.
The Office for National Statistics (ONS) reported that food prices inflated by 5.9% in March and that figure is expected to accelerate last month.
Speaking to BBC Radio 4’s Today programme, M&S chairman Archie Norman said: “It was very negative for consumer discretionary income but it’s perhaps not apocalyptic.
“It wouldn’t be surprising to see food price inflation over the course of the year running towards eight per cent to 10%.
“But we don’t know that yet because it runs through the year – some has run through now but there is quite a lot still to come.”
Analysts have suggested that overall inflation could rise to 9.1% when the ONS announces the latest official data on Wednesday.
Norman added: “What’s happening is global prices are rising, it’s not to do with UK food so much as the effect of freight costs, wheat prices, oil and energy prices knocking onto almost everything.
“As a consequence, all food retailers in the UK are – because we operate on very thin margins – going to have to reluctantly allow some food price inflation to run through the system.
“At the moment, UK spending is pretty good because customers still have quite a lot of stored-up savings.”
Meanwhile, the boss of Bidfood, one of the UK’s largest wholesalers, said this could have a knock-on effect on school meals.
Speaking to the BBC, Andrew Selley said: “The situation is going to lead to some difficult decisions for school caterers.
“Either they are going to serve smaller portions or use cheaper ingredients, which is not going to be good for children.”
He also added that the price of baked goods are currently up to 30% more expensive due to rising wheat prices, which also has an impact on pasta, eggs and chicken.
